We consider the demand for state contingent claims in the presence of a zero-mean, nonhedgeable background risk. An agent is defined to be generalized risk averse if he/she reacts to an increase in background risk by choosing a demand function for contingent claims with a smaller slope. We show...

We consider the demand for state contingent claims in the presence of a zero-mean, nonhedgeable background risk. An agent is defined to be generalized risk averse if he/she reacts to an increase in background risk by choosing a demand function for contingent claims with a smaller slope. We show...

The results of an asset market experiment, in which 64 subjects trade two assets oneight markets in a computerized continuous double auction, indicate that objectivelyirrelevant information influences trading behavior. Moreover, positively and negativelyframed information leads to a particular...

This paper reports the results of an experiment on portfolio choice in the presence of nontradeable income. The nontradeable income part could either be riskless or risky (background risk). (...)

Empirical research documents that temporary trends in stock pricemovements exist. Moreover, riding a trend can be a profitable investment strategy. (...)

Previous studies have shown that individuals exhibit a tendency to acquire an excessive amount of private information if information can only be communicated through a small and discrete action space. In this experiment we investigate demand for information when theaction space is continuous. (...)

(...) We provide support for the disposition effect. Participants who experience a gain sell their assets more rapidly than participants who experience a loss, and positively framed subjects generally sell their assets later than negatively framed subjects.